Nigeria’s Commitment to Clean Energy
Ugo Aliogo examines President Bola Tinubu’s pledge at the just concluded COP 28 in Dubai, United Arab Emirates, to introduce pioneering initiative that will deploy a fleet of 100 electric buses, as part of efforts to achieve clean energy in Nigeria
Nigeria is blessed with abundant renewable energy resources such as solar, wind, hydro and biomass that can be harnessed to scale up its energy supply and achieve universal energy access, energy security and the reduction of greenhouse gas emissions for climate change mitigation.
Energy consumption in the country is expected to continue to surge due to increasing population and improvements in the socio-economic life of the people.
The International Energy Agency, in a report published by the World Economic Forum (WEF), said over 140 million people had no access to energy in Nigeria, which is about 71 per cent of the country’s population.
The report said the federal government has set a goal to achieve universal energy access by 2030 and is implementing various policies and initiatives to increase access to clean and affordable energy for its citizens.
The report further quoted the Rural Electrification Agency, which said scaling rural electrification through distributed solar generation, mini-grids, and off-grid technology alternatives would have the potential to generate $9.2 billion in annual market investments for solar mini-grids, adding that this can also save Nigerian households and companies $4.4 billion annually, but that certain barriers persist in the broader adoption of solar generation.
According to the report, “Nigeria is the largest consumer of oil-fired backup generators in Africa, with over 80 percent of power generation coming from gas reserves. Natural gas thus remains the primary source of power in future short-term plans, despite the shift to other renewable sources. The recent attractiveness of natural gas lies in the low-carbon features that make it relatively ‘clean’ and less expensive in comparison to oil and coal.
“Using natural gas as a transitionary fuel with a viable pathway to greener future solutions has potential to foster some $18.3 billion in gross value added to the local economy. This potential, coupled with the global difficulties the gas sector is facing, can create exponential growth in the nation’s domestic value chain. In addition to exporting natural gas to the global market, supporting domestic markets through investments in gas production and local distribution infrastructure is critical to achieving Nigeria’s energy transition goals.”
FG’s Commitment
At the just concluded Climate Change conference COP 28, in Dubai, United Arab Emirates (UAE), President Bola Tinubu said Nigeria would take a significant step towards a sustainable and eco-friendly future by introducing a pioneering initiative to deploy a fleet of 100 electric buses.
He explained that the strategic initiative is aimed at significantly reducing Nigeria’s carbon footprint and modernizing the country’s transportation systems as part of a larger effort to position Nigeria and Africa as the pioneering frontier of green manufacturing and industrialization with a focus on natural gas as a transition fuel alongside other renewable energy sources.
To spearhead the transformative plan, the President announced the appointment of the Executive Chairman of the Federal Inland Revenue Service (FIRS), Mr. Zacch Adedeji, and the Director-General of the National Council on Climate Change (NCCC), Mr. Dahiru Salisu, to co-chair the Nigeria Carbon Market Activation Plan.
“This initiative stands as a testament to our dedication to environmental stewardship as clearly exemplified through our collaboration with the Africa Carbon Market Initiative. Our visionary plan is a strategic guidepost, directing Nigeria towards becoming an investment-friendly destination for carbon market investments.
“We recognise the imperative of fostering an environment that not only attracts investment but also upholds standardized and sustainable industrial practices. As a manifestation of our forward-thinking approach, we are actively looking to implement robust, enabling policies and frameworks that will serve as the catalyst for the burgeoning growth of the carbon market within our national borders.
“In further driving my commitment, I have recently approved an Inter-governmental Committee on Carbon Markets to be chaired by the Executive Chairman of the Federal Inland Revenue Service and the Director-General of the National Council on Climate Change to drive this visionary plan,” the President stated.
The President remarked that the initiative would be a concrete manifestation of the administration’s unwavering dedication to a carbon-neutral future, while assuring investors that this is only the commencement of the government’s ambitious plans, with many more impactful initiatives on the horizon.
Tinubu, while acknowledging the pressing need for a comprehensive global collaboration on climate-related challenges, called on global partners to join hands in accelerating collective efforts towards a net-zero future.
According to the President, “As we unveil our initiatives, I challenge other nations to emulate our strides in mapping out their sustainable futures with a clear understanding that Africa is a beacon of innovative solutions to climate-related challenges. In this pursuit, we acknowledge the pressing need for comprehensive global collaboration, and we reiterate our commitment to being an active participant in international efforts.
“Nigeria’s plans for a greener and cleaner economy can serve as an inspirational narrative for nations worldwide. Our comprehensive approach, rooted in visionary leadership and pragmatic action supported by our technical partners, is poised to become a blueprint for countries aspiring to also develop and catalyze their markets for sustainable growth.”
In his remarks, FIRS Chairman, Mr. Zacch Adedeji acknowledged the visionary leadership of President Tinubu as the guiding force behind Nigeria’s commitment to harnessing its vast carbon potential.
Adedeji pledged the full commitment of the Committee to drive the implementation of efficient policies and frameworks to achieve sustainable carbon market growth.
Reiterating Nigeria’s readiness to lead the global effort to combat climate change, Adedeji described the initial phase of the rollout of the electric buses as a tangible symbol of Nigeria’s commitment to modernizing its transportation systems while reducing Africa’s modest carbon footprint.
“In the immediate term, Nigeria will proudly unveil a series of innovative, clean, modern, and sustainable initiatives across diverse sectors. These initiatives are strategically designed to not only address climate change-related challenges, but also to position Nigeria as an attractive destination for global investments.
“The business-friendly environment and policy frameworks we are developing underscore our readiness to welcome and facilitate investments that align with our collective commitment to a greener future for Nigeria and the African continent,” the FIRS Chairman affirmed.
Commitment of Multilateral Organisations
The governments of United Kingdom, France, Spain and Japan together with the International Monetary Fund (IMF), the United Nations, African ministers, the Asian Development Bank and other international institutions, have given their strongest support for a proposal by the African Development Bank Group and the Inter-American Development Bank for the channeling of special drawing rights (SDRs) through multilateral development banks (MDBs).
The Heads of Major African and Global Development Institutions, representatives of G20 governments, the UN, the International Fund for Agriculture Development (IFAD) and the Rockefeller Foundation, commended the two banks for their innovative proposal that would deliver much-needed financial resources to vulnerable countries.
The channeling of SDRs through the MDBs strongly aligns with and was articulated in the MDB Vision Statement issued at the Summit on a New Global Financing Pact held in Paris in June 2023.
The IMF issued a historic general allocation of Special Drawing Rights (SDRs) worth $650 billion in 2021 to help countries deal with the impact of a global crisis triggered by the Covid-19 pandemic.
Africa, with a population of more than 1.2 billion, received only $33 billion representing about 5 percent of the total allocation, the smallest portion among the different regions of the world.
The African Development Bank and the Inter-American Development Bank have developed an innovative mechanism that preserves the reserve asset status of the SDR. The mechanism consists of a long-term loan from SDR-rich shareholders to an MDB. This loan will be structured as a hybrid capital instrument and can therefore be accounted for as equity in the MDB’s balance sheet. It is also underpinned by a Liquidity Support Agreement between contributing shareholders. That will allow any of them to access resources from other contributing members, should they experience balance of payment needs.
The African Union at its meeting of Heads of State in February 2022 urged wealthy nations to increase the SDR allocation to the continent to at least $100 billion and channel part of them through the African Development Bank.
Speaking at the roundtable, the Bank’s President Dr Akinwumi Adesina reiterated the benefits of channelling the SDRs through MDBs.
He said, “MDBs can multiply the channelled SDRs by at least four times their original values.” This multiplier effect means that $5 billion of channelled SDRs could be transformed into a $20 billion of new financing for Africa. The MDBs can multiply the channelled SDRs by at least four times their original values. This multiplier effect means that $5 billion of channelled SDRs could be transformed into $20 billion of new financing for Africa.”
Adesina added: “This will transform the SDRs from static foreign reserve assets into dynamic lending instruments, at affordable costs, to finance development, while preserving their reserve asset status, and be at zero cost to taxpayers in SDR-rich countries.”
However, Moulin said, “Through a liquidity support arrangement, France is willing to provide guarantees.
“We have a possible solution as part of the toolkit for the financing of climate and development; now we have to make it alive. The United Kingdom was one also one of the first countries to deliver on its pledge to channel 20 per cent of SDRs worth $4 billion when it signed agreements with the IMF at the Spring meetings this year. The UK commended the African Development Bank and the Inter-American Development Bank “for these innovative proposals to maximise the value of SDR channelling.”
Expert Opinion
Friends of the Earth Africa (FoEA) in partnership with Climate Action Network Africa (CAN-A), Africa Coal Network (ACN), Hand Off Mother Earth (HOME) Africa working group against Geoengineering and Environmental Rights Action/ Friends of the Earth Nigeria, hosted a side event at the COP28 in Dubai to review the path to a just transition to 100 percent renewable energy for Africa.
In his remarks, the Climate Justice and Energy Lead for FoEA, Ubrei – Joe Maimoni, who is also the Programme Manager for Environmental Rights Action/ Friends of the Earth Nigeria, highlighted that the transfer of subsidies from the polluting fossil fuels industry to renewables would still be a high hanging fruit process without a clearly spelt out policy framework, with measureable goal that is people centered, and serves the purpose of the continent, with the appropriate budgetary allocations, and government support in the form of good political will.
According to him, “There is word out here in Dubai that a decision to triple renewable pledges so we can meet the 100 percent renewables energy target will be made at this COP28, which posed a question to the peoples in the room, will this pledge light up Africa? Will it make us another pot of extractions? Or make us a powerhouse of renewable energy tech production? Will this keep us in the loop of consumption and extraction? Or will this move us to tech self reliance and equitably just mineral extraction usage? We should not allow this transition to be a renewal of energy colonization. Africans must be at the center of the pathways to 100% renewable.”
